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Digital transformation of logistics sector hits a high

20 Jun 2020

The COVID-19 pandemic has pushed the logistics sector in Oman, driven by Omani ports, to reach a high level of digitalisation, which normally takes years, in mere weeks.  

The sultanate has been one of the first nations in the region to fully implement the WTO Trade Facilitation Agreement, and has the fastest import and export compliance times within the GCC countries, according to the World Bank.

However, the need for digital push in the face of the crisis has catapulted the industry into an advanced stage of digital adoption, where the focus is on clearing shipment of goods in record time, sometimes even before arrival or at least shortly after arrival. 

In an interview with the Global Alliance for Trade Facilitation, a public-private partnership dedicated to international trade facilitation, Ali al Shidhani, vice president of Technology and Hilal al Kharusi, senior strategist at ASYAD Group, explained how the crisis has helped accelerate digital adoption in Oman’s ports. 

“The push for digital transformation is not new in Oman where the median age is just 25 and new technologies are deeply engrained in the lives of young Omanis. As a key gateway to growth markets of Africa and Asia, Oman has already set an ambitious trajectory for modernising its logistics industry, and ASYAD has been mandated by the government to enable digital transformation of Oman’s ports as part of the National Logistics Strategy, SOLS 2040,” they said. 

Yet when COVID-19 arrived, so did a new reality, especially with harnessing technology to accelerate digital transformation. “Whether people were ready for it or not, they became increasingly reliant on technology and the levels of digital adoption we expected to take months or even years to reach, were realised in mere weeks.” 

Suddenly, with restrictions on physical contact and people being encouraged to work from home, contactless transactions have become an absolute necessity and not a visionary goal. “Our interconnected economies are highly dependent on ports to ensure that the world’s medical supplies and food continue to reach those who need them.” 

In Oman, the Ministry of Transport announced all paper-based transactions were to be made electronic, including, but not limited to, delivery order, bill of lading and online payment. 

“Parties on the ground responded quickly. Some measures are temporary and have been adopted, understandably, to keep goods moving during crisis. For example, the Customs in Oman has been proactive to brace the impact of the crisis. Customs’ Bayan system allows traders to apply and obtain any required permits, often in a matter of seconds.

Also, Customs has adopted a flexible approach, agreeing that when importers and exporters are struggling to present an original copy of the certificate of origin for their goods, those goods will be allowed to pass based on their barcodes. In other cases, scanned documents sent by email are accepted as replacement for hard copies.  

“Yet other measures will bring long-term benefits. For instance, the submission and processing of delivery orders, bills of lading and service payments were moved online, and within just two weeks all transactions at the Port of Salalah had become digital, besides over 60% of those at the Port of Sohar.” Other digital measures that had been introduced in recent months are also now demonstrating their value during the crisis. 

Customs’ Bayan system, or single window, is enabling Customs to close some offices and instead, have agents clear goods virtually from the safety of their homes. Cargo manifests will be required to be submitted to Customs’ Bayan system at least 48 hours prior to vessel arrival, so that authorities can conduct risk management before the goods arrive. “This means traders can submit declarations and even see release of shipments before arrival or at least shortly after arrival.” 

Hutchison Port Sohar recently introduced the Ubi app; an online e-tracking service that updates vessel and gate schedules, tracks container shipments, and allows parties to exchange documents, payments, and data. Drivers are no longer required to wait for the physical documents before being able to pick up cargo. “The benefits of these measures are clear – not only for the safety of all parties involved, but also in reducing delays that can be costly for border agencies, port operators and traders alike,” they stated. 

While digitising Oman’s ports has been on the national agenda for some time, the global pandemic has highlighted its importance both for building resilience to future crises and making trade simpler and more cost-effective for parties along the supply chain. “This presents us with an opportunity to accelerate our transformation. Some of the measures we have seen introduced have demonstrated the potential of paperless transactions but go only part of the way to unlocking the full benefits of digitisation. In the near future, there may well be millions of transactions for ports’ stakeholders to process and that load can only be processed if the processes are truly digitalised.” 

They added that the next step for Oman is to connect all its ports through a National Port Community System – one common platform that will allow transporters, importers and exporters, port authorities and border agencies in all ports to exchange data, dramatically reducing the administrative burden and making trade simpler, faster and more secure.

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